Industry in North Dakota promises to reduce flared natural gas

Published 6:08 am, Friday, January 31, 2014

By Clifford Krauss

New York Times News Service

Faced with growing criticism and lawsuits, an oil industry task force representing hundreds of companies in North Dakota pledged Wednesday to make an all-out effort to capture almost all the natural gas that is being flared in the Bakken shale oil field by the end of the decade.

The gas being flared as a byproduct of a rush of oil drilling releases roughly 6 million tons of carbon dioxide every year, roughly equivalent to the output of three medium-sized coal plants. Because of a lack of gas-gathering lines connecting oil wells to processing plants, nearly 30 percent of the gas flowing out of the wells has been burned as waste in recent months.

The task force reported to the North Dakota Industrial Commission, the state regulator, that the industry could in two years improve the percentage of gas captured from 70 percent to 85 percent and capture as much as 90 percent in six years.

That would still mean more waste at Bakken than at virtually all the country's major oil fields. But it would represent a substantial improvement because so many wells are being drilled. Energy experts expect a 40 percent increase in the gas produced from the Bakken field by the end of 2015.

"The industry recognizes the importance of capturing this valuable resource," Ron Ness, president of the North Dakota Petroleum Council, said in a statement.

The task force said the industry could reach its goals by speeding the construction of pipelines and processing plants, and it called for stricter regulations requiring producers to create gas-capture plans before filing for a drilling permit. Failure to submit such a plan, according to the task force proposal, "may result in the denial or suspension of new drilling permits, while existing wells may be required to restrict production."

The task force also recommended that the state support the rapid build-out of pipelines and electrical-transmission infrastructure with property tax credits, production tax credits and low-interest loans along with incentives for increased local industrial use of gas for fuels, petrochemicals and fertilizers.

"It looks like a pretty good solution," said state Sen. Connie Triplett, a Democrat who has been urging stricter controls on flaring. "They actually invited regulation from the Industrial Commission, which has to be a first for the oil industry in North Dakota."

The Bakken field is one of the fastest-growing oil producers in the country, rising from negligible production six years ago to 1 million barrels a day because of technological advances in fracturing shale rocks and drilling horizontally.

North Dakota has become the second-biggest oil-producing state after Texas, and it has the lowest unemployment rate of any state thanks mostly to the oil industry. But the increase of flaring and a rash of explosive train accidents involving Bakken crude have raised concerns in North Dakota that there has been too much of a rush to increase production without adequate concern for safety and the environment.